Asian Stocks Fall Further After New Virus Variant Spreads

By JOE McDONALD, AP Business Writer

BEIJING (AP) — Asian stock markets fell further Monday after the omicron variant of the coronavirus was found in more countries and governments imposed travel controls.

Tokyo, Shanghai, Hong Kong and Sydney declined, though losses were smaller than Friday’s fall after reports said the variant first spotted in South Africa appear to spread around the globe.

On Friday, Wall Street’s benchmark S&P 500 index fell 2.3% for its biggest daily loss since February. Investors sold banks, energy and airline stocks and shifted money into bonds and other safe haven assets.

“Financial market volatility will likely persist through this week,” said Venkateswaran Lavanya of Mizuho Bank in a report.

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The Nikkei 225 in Tokyo fell 1.7% to 28,260.47 after Prime Minister Fumio Kishida announced Japan will bar entry by foreigners starting Tuesday.

The Shanghai Composite Index lost 0.4% to 3,548.13 and the Hang Seng in Hong Kong sank 1.2% to 23,811.17.

The Kospi in Seoul declined 0.9% to 2,910.74 and Sydney’s S&P-ASX 200 retreated 0.5% to 7,239.70.

India’s Sensex opened up 0.7% at 57,539.90. New Zealand, Singapore and Bangkok fell while Jakarta advanced.

The World Health Organization called omicron “highly transmissible,” but it was unclear whether it is more dangerous than earlier variants.

Governments have imposed new travel controls, fueling investor fears about possible setbacks in containing the pandemic that has killed more than 5 million people since the first cases in late 2019.

The new variant was found in Hong Kong, Belgium and Tel Aviv. The European Union, the United States and Britain imposed curbs on travel from Africa. Israel banned entry by foreigners.

Also Monday, Japan’s government reported retail sales rose 1.1% in October over the previous month. Vehicle sales fell 6.7%.

On Friday, the S&P 500 dropped 106.84 points to 4,594.62. The Dow Jones Industrial Average lost 905.04 points, or 2.5%, to 34,899.34 after falling more than 1,000 at one point. The Nasdaq Composite lost 2.2%, to 15,491.66.

Exxon fell 3.5% while Chevron shed 2.3%. JPMorgan Chase dropped 3%.

United Airlines gave up 9.6% and American Airlines declined 8.8%.

Vaccine makers benefited. Pfizer shares rose more than 6% while Moderna shares jumped more than 20%.

Investors shifted money into bonds and companies that benefited from previous rounds of anti-disease controls. Online meetings service company Zoom Communications rose nearly 6%.

The omicron variant might complicate planning by central banks that are deciding when and how to withdraw stimulus that is boosting stock prices.

Investors were rattled last week when notes from the Federal Reserve’s October meeting showed officials said they were ready to consider raising interest rates sooner than planned in response to higher inflation. The Fed previously said its first rate hike might not come until late 2022.

In energy markets, benchmark U.S. crude surged $3.17 to $71.32 per barrel in electronic trading on the New York Mercantile Exchange, rebounding from Friday’s $10.24 plunge. Brent crude jumped $2.82 to $74.41 per barrel in London.

The dollar rose to 113.28 Japanese yen from Friday’s 113.19 yen. The euro rose to $1.1281 from $1.1319.